To help remember the pandemic time period when I’m older, I’ve decided to do a recap of some highlights and lowlights of each month. Here is my Financial Samurai August 2020 review.
I’m sure 20 years from now we’re all going to look back with wonder at all that transpired.
Overall, I feel like we’re living in the twilight zone. On the one hand, fortunes have never been greater. On the other hand, uncertainty has never been higher.
I would much rather have less fortune and more freedom and certainty. Wouldn’t you?
Financial Samurai August 2020 Review
Physical And Mental Health
All of us continue to be healthy, which is something I cannot take for granted. Between Dec 1, 2019, and Feb 15, 2020, I was sick 80% of the time to varying degrees. At some point, so were all my family members. There was some super-cold that went around preschool. Maybe it was COVID, I’m not sure.
I’d really like to go to at least Feb 1, 2021, without getting sick again. And if I do get sick, I hope it lasts for less than two weeks like usual. Therefore, to help cope with so many things still being shut down, I remind myself to appreciate my health.
Actor Chadwick Boseman’s death hit home because I’m 43, the age he died. I’m amazed he was able to film all those movies after he was diagnosed with late-stage colon cancer. He has inspired me to work through adversity.
Chadwick’s death is also a reminder to be kind to others. You never know what people are going through behind closed doors.
I enjoyed watching his commencement speech at Howard University. If you are seeking some motivation during these uncertain times, it’s worth watching as well.
My favorite passage:
Purpose crosses disciplines. Purpose is an essential element of you. It is the reason why you are on the planet at this particular time in history. Your very existence is wrapped up in the things you are here to fulfill. Whatever you choose for a career path, remember the struggles along the way are only meant to shape you for your purpose.
My mental health seems fine. It is supported by regularly playing tennis and softball 3X a week. I always feel better after I exercise, even if it’s just going for a 30-minute walk. In April, when everything was shut down, my mental health was at its poorest.
Writing is also a great way to exercise the mind and address any negative emotions you might have. I encourage you to give it a try.
Whenever I need a pick-me-up, I always go and spend time with my eight-month-old daughter. She always smiles when I enter the room. There’s nothing I enjoy more than snuggling with her! She is just starting to crawl. She also has her two front lower teeth. We feel very blessed that she is healthy and in our lives.
My son is still hit or miss. He can be very loving one moment and cold the next. We have some great moments, especially when we are playing outside. He is starting to say “I love you daddy” and “I missed you daddy” more to my delight.
However, everything people say about threenagers is true. The tantrums are often explosive. I wonder when his emotions will become more stable.
Since April 2017, I have heard a cry and/or a whine multiple times a day, every day. It’s a part of parenthood, but it’s also hard on the nerves. I feel for working parents without any childcare or school options. If my wife and I are exhausted every day, I’m sure working parents are as well.
The desire for more space by working parents will absolutely drive the demand for larger homes in the near future. Bigger homes are better from now on.
Social Development Needed
One concern I have is whether my boy will be socially stunted if he does not start regularly interacting with kids his age going forward. We are very focused on teaching him good manners.
Whenever I bring him to our neighborhood playground, he tries to say hello to other kids. He’s finally seeking social interaction, which he hadn’t been before school shut down.
Given we’re not sending him back to preschool this fall, I’ve reached out to other parents to arrange playdates outside. I’m hoping that the benefits of one-on-one play with another child and family we trust outweigh the risk of getting COVID.
How sad and infuriating I have to write this. If any parents out there have children who didn’t go to preschool and who are great socially, please send some assurances.
Finances Doing OK
With stocks at record highs, it’s no surprise that our net worth is also at a record high. According to Personal Capital, our net worth is up about 12%, which surpasses our annual target of 10%. If things hold, 2020 will turn out to be a record dollar net worth gain.
However, we are slowly losing ground on our outperformance versus the S&P 500 given our net worth is more conservatively allocated. That said, our baseline financial benchmark is to grow our net worth 3X the 10-year bond yield. Therefore, we are satisfied.
I regret selling names like Tesla earlier in the year, but at least I’ve still got some shares. What I kind of forgot was that I also have names like Apple in my rollover IRA, which has helped.
It is hilarious to me that retail investors are driving up share prices after stock splits, despite no change in fundamentals. Discipline is important during times of mania.
I’m not investing any more in the stock market at current valuations. Further, stocks have reached the upper limit of my net worth at ~25%. Instead, my main focus is on stacking cash to buy a larger ocean view home in San Francisco, which I’ve found.
I wouldn’t be surprised if August is as good as it gets in the stock market. Valuations are just way too expensive for my taste.
Real Estate Stays Strong
The San Francisco real estate market is interesting. There has been an increase in condo inventory in the downtown area, causing prices to soften. However, the supply for single family homes seems normal. Therefore, prices for single family homes continue to be strong, especially with the NASDAQ up 35%+.
On the landlord front, both sets of tenants have continued to pay rent on time all year. Their jobs are flexible and they are well paid. Back during the 2008-2009 financial crisis, I didn’t have any hiccups. Hopefully everything will work out again.
Once I’m done with my home remodel this year, I should be able to sell it for a 20% – 25% gross profit. The selling price is based on my analysis and the opinions of six realtors whom all recently sold homes in my neighborhood.
I’m just not sure whether I want to sell given the location, the views, and the fees. A home’s importance has never been greater given how much more time we’re spending at home.
A couple of my friends are buying 2nd and 3rd homes for their immediate family members to create a family cluster in their neighborhood. Maybe I’ll do the same.
In August, I got a nice real estate crowdfunding distribution of $4,248 after a $9,714 distribution in May. This was an unexpected surprise.
I continue to conservatively value my physical real estate holdings. But it was fun to play around with my net worth when I bumped the values to where one reader thought I should have sold one of my homes for in 2017. The spikes in my net worth chart below reflect the valuation adjustments.
I’ve definitely noticed a migration to the western part of the city, which is helping prices. Demand is coming from people living in condos downtown who want to rent or buy single family homes. I know this because I recently went through the tenant search process.
With stock prices way up, I’m glad to convert some of the funny money into a larger home for my family. The more people who leave San Francisco, the less I want to relocate to Honolulu.
I’m surprised that the lockdowns in Honolulu are even more severe than in San Francisco. For example, Honolulu residents can’t even go to the beach to lie down!
Finally, I earned another surprise financial windfall in August that I’ll discuss more about in an upcoming post. It was a private equity investment I made in late 2014.
July was a good month in terms of traffic. I thought it wasn’t going to be beat for the rest of the year. But it turns out that August was an even better month. I’m thankful because July and August are historically two of the slowest months due to summer vacation.
I did spend a lot of time updating older posts, which may have helped. However, I didn’t do anything more than publish my normal 3X a week cadence. I did have one or two posts do well on larger media outlets.
There’s pent up advertising spend from 1H that is being unleashed in 2H. I sense that many companies are trying to “catch up” as there is a competitive fear of being left behind.
If the strong data from Financial Samurai is a leading indicator for the economy, then we should feel pretty sanguine about the future. Analyzing my traffic data shows the fear is almost all gone, which could be a bad thing.
However, two months of strong traffic does not make a trend. I think September is going to be down because we’re all exhausted. Let’s see.
A Key Revelation
Stress management is something I’ve been good at for a long time. As an aging athlete, I’ve had to stay calm under pressure many times to win tennis matches. While working in finance, I had to control my anxiety given big money was often at stake.
Since leaving work, my stress and anxiety have fallen dramatically. I’d say it went from a 6 to a 3, compared to a baseline of 6. However, ever since I became a father in 2017, I’ve noticed my stress and anxiety take a u-turn upward to a 6 and sometimes higher. The main reason for the increase is the concern I have for my children’s future.
All this racial tension in America reminds me of my past racial encounters growing up in Virginia. After each incident, I then wonder whether my children will experience similar racism as they get older as well. Hopefully, these encounters will make them grow stronger, not weaker. However, you just never know how some people will react to trauma.
With each preschool rejection letter (six total), I was reminded how poorly positioned my family is in society. As two unemployed parents, we lack status which society always covets.
I thought being a stay at home dad who could volunteer a lot and being a two-time high school tennis coach champ would be looked upon favorably by admissions. I’m in a unique position where most of my time is focused on childcare, education, and community involvement. Guess not.
The Need For Some Status
Starting in late-2018, I began to contemplate whether it was worth climbing the status ladder again for the sake of my children.
Would I have to get a “high-powered” job? Would I have to lose my privacy by telling admissions I run Financial Samurai, which really doesn’t mean much? Do I have to join company boards? Do I need to start accepting TV interview requests?
Once you’ve been out of the status game for so long, you will loathe the idea of getting back in. I’m happy to be a nobody. But being a parent is no longer just about you anymore.
Thanks to the pandemic, I’m pleased to report there’s no longer a need to seek status or fame! The pandemic has helped equalize life because we’re mostly all stuck at home.
Thanks to less competition, we’ve now got more schooling options. For example, the preschool we ultimately got accepted to says it still has several spots. In the past, this never would have happened. Now I’m hopeful there will be less competition for public and private grade school spots down the road.
Therefore, I’m pumped about big city living again for ourselves, for our children, and for other families who choose to stay.
Six months into the pandemic, my stress level has dipped back down to around a 4 out of 10. Clearly, a massive financial recovery plays a big roll in feeling better as well.
Hooray for being allowed to retain nobody status!
The Start Of Samurai September
It feels like many of us jumped off a cliff and landed in a big vat of cash. It is truly absurd how much wealth has been created during this pandemic for investors so far.
Trying to beat a record online month is difficult. This is where investing in other motivated assets can really pay dividends. When you want to take it easy, hopefully, they’ll keep on going.
I plan to spend more time with family, write less, and work more on my health in Samurai September. I’m worn out and really need a break.
Instead of always waking up by 5 am to write, I hope to sleep in until 6 am or 6:30 am if my body will allow. It’s been tricky because I’ve been automatically waking up around 5 am since 1999.
I’ve got to find some way to train my mind to let go. In essence, I will be focusing less on entrepreneurship and more on retirement again.
I’m also going to contact the foster home and rehabilitation center for the disabled in my neighborhood and ask if I can help donate my time and money.
September and October are golden months in San Francisco due to the great weather. Further, with school restarting, places will be less busy. We plan to go on a couple family vacations to Napa and Lake Tahoe.
Here’s to taking it down a notch and holding on to what we’ve recovered!
How was your August? Are you as exhausted as I am? How much better do you think the year can get? Any tips on worrying less as a parent? Any tips on how to sleep in more and/or reduce the desire to grind?